Benson (or Mr B as he is known) is optimistic: “It is exciting to be involved with an international brand and we want to be a home away from home for the boarders and students in the town.”
Having worked for Sun International for more than 20 years, he is a veteran of the service industry who believes that friendly and efficient service combined with the Spur brand's “passion for food” will make his efforts successful.
Benson spent six weeks at “Spur University” in Cape Town where he completed a training course designed to teach him more about the brand and how to effectively manage his franchise.
Burger Mondays and Rib Thursdays
Already popular with notoriously stingy students on Mondays because of its '2-for-1' burger special, the Redwood Spur has also become a popular destination on Thursdays thanks to its Bottomless Wings and Ribs offer.
The average Rhodes University student might find the price of R99.95 (Bottomless Beef Ribs are available for R119.95) prohibitively expensive.
But some students see these Spur specials as a break from dining hall food and others see the Thursday offer as a challenge.
Surveying the carnage on a Thursday, one cannot help but wonder how Redwood Spur makes money from such a deal – this is something that must certainly be on Benson’s mind.
Corporate giant
On a wider scale, Spur is indeed turning a profit, no matter how many wings you manage to demolish. This is because Spur is a multi-national conglomerate with enormous buying power and turnover (check out their 2011 financial report).
The Spur Group, of which the Spur steak ranches are the foundation, also includes the Panarotti’s Pizza and John Dory’s brands and is listed on the JSE trading under the name Spur Corporation (or just Spur Corp).
Spur Corp has over 364 restaurants (280 Spurs, 57 Panarottis and 27 John Dory’s) around the world, including in Australia, the United Kingdom, Ireland and Uganda.
Spur Corp's target market is middle-class urban families. The Western Cape has 86 Spur Corp restaurants while Gauteng has 100. The Eastern Cape has 19. There is only one branch in Grahamstown, and no other similar restaurant chains to compete with, which is a bonus for Benson.
In 2011 Spur Corp made R111 000 000 in profit and all of Spur Corp's restaurants did R3.49 billion rands' worth of business in total last year.
Costs and benefits
With his new franchise, Benson is contractually obligated to pay a monthly fee for the right to be part of the Spur chain. This fee represents a percentage based on turnover and not profit of the restaurant.
In return, Benson gains access to the Spur brand (and its marketing) not to mention its huge network of suppliers and the associated buying power.
But these benefits come at the cost of market freedom and he cannot change his prices or offer specials not cleared by the head office, even if he is making a loss.
While profits from 'all you can eat' specials are not great (and sometimes even non-existent), Spur relies on the fact that not everyone is taking 'all you can eat' as an extreme sport (like this man trying to “out eat” a bear) and that not everyone who comes in on a Thursday will order the special.
Healthy profit margins are also yielded by things like onion rings, fries and of course beverages, for example Castle Lager, thanks to Spur's close relationship with SAB.
But it isn’t only about the cash: exposing people to the brand and ‘getting bums in seats’ is the cornerstone of any business and well worth the risk of the occasional loss that the ‘big game eater’ might inflict.
Although Benson has bought into the 'Spur dream', he certainly can't afford to be caught sleeping. With the Grahamstown business environment as unstable as it is, he has work cut out for him to seize his opportunities and manage his risks in the hopes that he'll attain success – one bottomless chicken wing at a time.
